Professor Paul Krugman’s most recent New York Times article makes the strong point that the political moderates, far from being the voice of reason, have taken away the very essence of the stimulus package and stripped it bare, giving more tax cuts where they are not needed and putting more pressure on state and municipal governments to continue on their unsustainable paths towards eventual default and collapse.

The original proposal and what then passed in the House with some slight modifications has been completely changed in the Senate. The main drivers of economic stimulus are gone. What is left is a political compromise that will do very little to stimulate the economy and put people back to work, let alone fix our crumbing schools, modernize our inefficient healthcare system or expand social services when and where they are most critically needed.

Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.

Dean Baker from the Center for Economic Policy Research makes a similar argument in his piece in The Guardian Unlimited. Describing the Senators who chose political expediency and antiquated economic theory over creating jobs and restoring a modicum of stability back into our economy, he writes:

But shame has no place in the corridors of power in Washington. Hence, the drive to dilute the stimulus. Like the jogger who finds a short-cut to reduce his mileage, the centrists senators are proud of themselves for cutting back the spending in the stimulus. That may be cleaver politics, but it is not smart economics. And the country really cannot afford too much more by the way of stupid economics from the folks in power.

Any hope for meaningful stimulus is gone. In effect, the Democratic, despite their strong electoral mandate and Congressional power, have cowered to Republican pressure and have cut the rug up from underneath themselves. By allowing a much smaller and inadequately targeted piece of legislation to pass, the Democrats have ensured the failure of their own stimulus package. As the New York Times editorial board explained it, ‘a bill that is merely better than nothing won’t be nearly good enough.’

Faced with the prospect that history will again demonstrate that government spending and investment are important tools in confronting an economic crisis, it is now clear that conservatives are engaged in a misinformation campaign to mislead the public.

The Democratic Congress has done very little to push back, allowing their own legislation and recovery plan to be attacked so easily. By allowing the debate to be crafted by shameless political pundits on the Right instead of policy experts like Krugman, Baker or Columbia’s Joseph Stiglitz, the Democrat have allowed the Republicans to make 2009 ‘the Year of the Quack Economist’.

When members of the House and Senate sit down this week to craft a final version of their differing bills, they must include the most-effective provisions — those that provide powerful stimulus and help those Americans who are most in need.